When I was young the upper Midwest was full of idealistic Democratic senators; Gene McCarthy, Hubert Humphrey, George McGovern, and from my own state, Nelson and Proxmire. Today that seems like a completely different world.

In 1988, I invested most of the earnings from this lecture circuit acquiring the leasehold on Connecticut’s Stratford Inn. Hotels, inns and restaurants have always held a special fascination for me. The Stratford Inn promised the realization of a longtime dream to own a combination hotel, restaurant and public conference facility — complete with an experienced manager and staff.

In retrospect, I wish I had known more about the hazards and difficulties of such a business, especially during a recession of the kind that hit New England just as I was acquiring the inn’s 43-year leasehold. I also wish that during the years I was in public office, I had had this firsthand experience about the difficulties business people face every day. That knowledge would have made me a better U.S. senator and a more understanding presidential contender.

Today we are much closer to a general acknowledgment that government must encourage business to expand and grow. Bill Clinton, Paul Tsongas, Bob Kerrey and others have, I believe, changed the debate of our party. We intuitively know that to create job opportunities we need entrepreneurs who will risk their capital against an expected payoff. Too often, however, public policy does not consider whether we are choking off those opportunities.

My own business perspective has been limited to that small hotel and restaurant in Stratford, Conn., with an especially difficult lease and a severe recession. But my business associates and I also lived with federal, state and local rules that were all passed with the objective of helping employees, protecting the environment, raising tax dollars for schools, protecting our customers from fire hazards, etc. While I never have doubted the worthiness of any of these goals, the concept that most often eludes legislators is: “Can we make consumers pay the higher prices for the increased operating costs that accompany public regulation and government reporting requirements with reams of red tape.” It is a simple concern that is nonetheless often ignored by legislators.

For example, the papers today are filled with stories about businesses dropping health coverage for employees. We provided a substantial package for our staff at the Stratford Inn. However, were we operating today, those costs would exceed $150,000 a year for health care on top of salaries and other benefits. There would have been no reasonable way for us to absorb or pass on these costs.

Some of the escalation in the cost of health care is attributed to patients suing doctors. While one cannot assess the merit of all these claims, I’ve also witnessed firsthand the explosion in blame-shifting and scapegoating for every negative experience in life.

Today, despite bankruptcy, we are still dealing with litigation from individuals who fell in or near our restaurant. Despite these injuries, not every misstep is the fault of someone else. Not every such incident should be viewed as a lawsuit instead of an unfortunate accident. And while the business owner may prevail in the end, the endless exposure to frivolous claims and high legal fees is frightening.

. . .

In short, “one-size-fits-all” rules for business ignore the reality of the marketplace. And setting thresholds for regulatory guidelines at artificial levels — e.g., 50 employees or more, $500,000 in sales — takes no account of other realities, such as profit margins, labor intensive vs. capital intensive businesses, and local market economics.

The problem we face as legislators is: Where do we set the bar so that it is not too high to clear? I don’t have the answer. I do know that we need to start raising these questions more often.

Mr. McGovern, the 1972 Democratic presidential candidate, died Sunday at age 90.

In 1972 one of the most decent men to ever run for president of the US ran against one of the least decent. The fact that I had a rather low opinion of McGovern at the time tells you much more about my flaws than his.

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Someone old enough to remember the 1972 election please explain Watergate to me. Nixon’s team believed that McGovern was a dangerous radical, and that defeating him was not just a matter of political gain, but of national security, so the usual rules of fairplay did not apply. Okay, I get that.

Here is what I don’t get. The American people obviously agreed that McGovern was a dangerous radical, as evidenced by giving Nixon a landslide of about 65%-35% of the vote. It seems a safe assumption that people did not vote for Nixon because they liked him. They could only have given him such a landslide out of fear that the Democrats had lost their senses.

But a 30 point lead has to be showing up in the polls ahead of time. Dirty tricks are what you do when you are behind and running scared. When you are that far ahead in the game, you can afford to be gracious. So why did Nixon feel the need to resort to dirty tricks to win an election he already had in the bag? Talk about senseless self-destruction!

E-L, you´re right. Nixon was obsessed with defeat since 1960. Remember how he goaded Burns ahead of the 1972 election not to let unemployment rise. No stone should remain unturned. Any perceived by him threat was to be strongly dealt with.
Some of that became very clear in his 1974 interview to David Frost (who became instantly famous for getting Nixon to say to the nation:”I´m sorry”!)

In fact, I’ve always heard that lots of Republican operatives were annoyed by the Nixon campaign targeting GOTV efforts at blue collar Old Left types to get them to come to vote against McGovern and for Nixon– but also for their local Democratic Representatives and Senators.

The Democrats gained two Senators in 1972 (one of which was Joe Biden beating an incumbent Senator by the slimmest of margins) and only lost a mere 12 seats, which would normally seem unusual in a landslide election.

Of course, McGovern also said this:
“The growing hysteria of the administration’s posture on Cambodia seems to me to reflect a determined refusal to consider what the fall of the existing government in Phnom Penh would actually mean…. We should be able to see that the kind of government which would succeed Lon Nol’s forces would most likely be a government … run by some of the best-educated, most able intellectuals in Cambodia.”

Perhaps he felt he had to say that in order to be anti-war, rather than be anti-war even if the Cambodian result was awful. But when he lost by that margin anyway, I tend to doubt that theory, and think that that’s what he really thought.

McGovern was also, like many of those Democrats of that age, extremely passionate about farm subsidies, as that, not his antiwar views, was what kept him getting reelected.

‘So why did Nixon feel the need to resort to dirty tricks to win an election he already had in the bag?’

He didn’t. The Watergate break-in happened without Nixon’s knowledge. Nixon was one of the smartest people ever to be President (maybe smarter than Bill Clinton), he wouldn’t have condoned the break-in, because it was high risk, low reward.

There is a very interesting story that John Dean was the instigator, looking to retrieve some embarrassing information about his wife. No one really knows what the truth was.

My hypothesis is that the Reserve Bank of India is living a ‘Sumnerian’ dream in terms of stable NGDP growth. Of course, as a dyed-in-the-wool ‘concrete steppe creditist’ I think it’s probably because they’re internally targeting/adjusting the thermostat for some credit aggregates, and that helps them achieve stable NGDP growth almost by default.

Nixon wanted to win by a larger margin than Johnson. 64 was a landslide, but Nixon had hoped that he would be the nominee for 64 – it would broker a peace between the Goldwater and the Rockefeller republicans and it wouldn’t be a direct rematch of 1960 – but ultimately Goldwater was slaughtered. In fact, his margin was not as great as Johnson for they had no coattails. Some of this you can find if you listen to the Nixon tapes. There are some good books on the subject if you have the time.

On a side tangent I love it when conservatives get all mushy on Nixon. Part of my thesis that there is only one type of conservative: the social conservative.

[…] how much he learned from trying to start a business after he'd left politics. TheMoneyIllusion has an excerpt as well: In 1988, I invested most of the earnings from this lecture circuit acquiring the leasehold on […]

[…] have the answer. I do know that we need to start raising these questions more often. That was George McGovern on his post political career. He freely admitted that he wished he would have known what it was […]

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Welcome to a new blog on the endlessly perplexing problem of monetary policy. You’ll quickly notice that I am not a natural blogger, yet I feel compelled by recent events to give it a shot. Read more...

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My name is Scott Sumner and I have taught economics at Bentley University for the past 27 years. I earned a BA in economics at Wisconsin and a PhD at Chicago. My research has been in the field of monetary economics, particularly the role of the gold standard in the Great Depression. I had just begun research on the relationship between cultural values and neoliberal reforms, when I got pulled back into monetary economics by the current crisis.